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Microsoft Customers ‘Overwhelmed,’ Creating Consulting Opportunities

Overwhelmed

Edward Gately

Microsoft partners are seeing Office 365 technology updates, refreshes and changes outpacing their customers’ ability to keep up with them.

That’s according to harmon.ie’s second-annual report on the transition to the cloud for Microsoft partners. “The Evolving Microsoft Cloud: Opportunities and Challenges for Microsoft Ecosystem Partners” is based on an April survey of more than 200 Microsoft partners globally.

David Lavenda, harmon.ie’s vice president of product strategy, tells Channel Partners the goal of the report was to revisit last year’s survey and see “how far the cloud has changed the partner’s world since last year.”

harmon.ie's David Lavenda“Last year, the big news was how the move from on-premises to the cloud was impacting the partner’s business vis-a-vis things like server patches and upgrades,” he said. “The opportunity uncovered last year was around migration-consulting services at the business level. This year, the big news is that organizations are starting to feel the benefits but also the downside of rapid product refreshes. The big news for partners is that this is an opportunity to help close the gap between new technology/infrastructure and the customers’ ability to take advantage/adapt to the changes.”

More than one in four respondents said cloud migration would account for more than half of their business by 2017, a 62 percent increase over 2015. Partners said the majority of their customer base would move “some portion of their productivity services” to the cloud/Office 365 in the next 12 months, with 95 percent indicating they would move some percentage of their email and Office applications, 92 percent with online meetings, 93 percent with file sharing and 91 percent with Skype for Business. This likely represents customers testing the waters with Office 365 before deciding whether to commit to the cloud, according to the report.{ad}

Some 55 percent of respondents plan to add cloud management services, including cloud identity management, to their portfolios in 2016.

Cost still is a significant factor, with 56 percent reporting it as a primary reason for their customers to adopt Office 365. However, its importance has been reduced, with 69 percent of partners reporting customers now place greater value on access to the latest versions of applications for all users. Additionally, faster refreshes also are an increased priority at 30 percent, which represents a 45 percent growth over last year’s survey.

As companies seek cloud services that are easily consumed, partners see an opportunity to build user-friendly services around Office 365, with 31 percent adding services to address and enhance the user experience. Additionally, 24 percent cite such services as having the greatest potential for revenue growth, a 148 percent increase over 2015, according to the report.

Compliance and information governance now are front and center on the partner and customer agenda, with partners focusing on …

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… the importance of managing, classifying, storing and retrieving emails. In response to a rising push for compliance and record management across all customer segments, more than half of partners now offer compliance services (56 percent) and/or provide information governance and records management services (53 percent).

As the pace of change outstrips organizations’ ability to absorb the information or allow them to develop materials to train the trainers, Microsoft Professional Services is also experiencing challenges in keeping up with the pace. This likely is contributing to partners’ decreasing concerns about Microsoft Professional Services as a competitor, with only 26 percent viewing competition from this group as a major challenge versus 38 percent in 2015.

Also, because of the rapidly evolving cloud market, partners are unable to rely solely on the Microsoft ecosystem, according to the report. Two-thirds said they partner with cloud providers other than Microsoft across a wide array of functional areas, with backuprecovery and archiving the most common category (38 percent), followed by CRM and help desk and support at more than 20 percent each. Those who look to expand their capabilities are vying the enterprise file sync and storage (52 percent) and content management and collaboration (48 percent) as their new competency investments.

As Microsoft continues to innovate in the cloud, its rapid release of new capabilities is overwhelming its customers who are struggling to make sense of them, said Yaacov Cohen, harmon.ie’s CEO. This creates opportunities for Microsoft partners to offer consulting services and innovative products that hide complexity and simplify the evolving Office 365 user experience, he said.

“Any opportunity presents new challenges,” Lavenda said. “In this case, how do you take an ongoing stream of new features and, No. 1, make people aware of them and their value, and No. 2, make them usable – so people can actually take advantage of their utility. We all know the biggest impediment to change is people’s reluctance to do things differently. It’s not about technology. In this case, change is inherent in the process. What can partners do to hide the changes while enabling people to take advantage of them — now that’s a challenge!”

Additional findings from the report include:

  • With Microsoft partners now readily embracing Office 365 and preparing to usher in the next generation of SharePoint, crafting hybrid services is being increasingly explored as a front-and-center strategy.
  • A year further along in the transition to the cloud, partners have greater confidence in their …

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  • … ability to create strong cloud/Office 365 competencies, with almost every challenge category showing reduced concern by respondents over 2015.
  • Microsoft is encouraging its partners to consider offering vertical services around Office 365, particularly in industries such as health care, legal and agriculture. While still a small percentage of their overall service offerings, vertical services are growing as a percentage of their portfolio, with more than 25 percent offering vertical services in 2016, a 44 percent increase over 2015. Additionally, nearly 25 percent see vertical services as providing the greatest revenue potential for their business in 2016, a 42 percent increase over 2015.

“Microsoft partners and IT teams have to throw away their on-premises playbook — the cloud is a different game,” said Tony Redmond, principal at Redmond & Associates, senior contributing editor at Windows IT Pro and author. “It is time to reshape your business and face the new cloud realities and opportunities. That means taking a broad perspective of Office 365 that goes way beyond the boundaries imposed by a single application such as SharePoint Online or Exchange Online. People need to upskill by developing new competencies, such as compliance, advanced security and analytics so that they can exploit the new capabilities available in Office 365 to solve real business problems. Those who remain fixated on just one part of Office 365 will waste the opportunities that open up through the new development fabric that Microsoft has created.”


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